Pension fund panel to review portfolio

A government investment panel tasked with reviewing the nation’s public pension portfolio will hold its first meeting Monday, sources said.

The panel, chaired by University of Tokyo professor Takatoshi Ito, will have about five members, they said. It will compile ideas for hiking the equities-related portion of the portfolio while reducing the bond portion to two-thirds, they said. The changes are to take effect in fiscal 2015.

The Government Pension Investment Fund, the world’s largest, had about ¥112 trillion in assets under management at the end of 2012.

The review is part of Prime Minister Shinzo Abe’s official economic strategy.

The panel hopes to come up with ways to improve long-term returns and bolster risk management via diversification.

If the fund starts engaging in long-term stock investment, its participation is expected to “promote corporate capital spending and research and development.”

Earlier this month, the welfare ministry cleared revisions to the GPIF’s medium-term portfolio between fiscal 2010 and fiscal 2014. The portion invested in Japanese bonds was cut to 60 percent from 67 percent, while that spent on Japanese stocks was raised to 12 percent from 11 percent. The amounts put into foreign bonds and stocks were meanwhile raised to 11 percent from 8 percent, and to 12 percent from 9 percent, respectively.

The review panel is expected to consider more drastic asset shifts in light of the government’s growth strategy.